Supply chains (supplier network, routes and means of transport, distribution, etc.) are present and invited to changes to which we do not respond quickly and well. The pandemic, the Russian invasion of Ukraine, climate change, disputes between states over power and control of resources and markets are its causes. These are opportunities that should be used, and threats that should be minimized.

Climate change is already affecting trade flows. In 2020, wildfires in California destroyed millions of acres of forest, disrupted the timber supply chain, and caused billions of dollars worth of infrastructure damage. In 2021, floods in Germany and Belgium caused billions of dollars in losses to factories, roads and disruptions in the flow of goods.

The government announces measures to help public banks before the arrival of the El Niño phenomenon

Last March, a lack of rain forced the Panama Canal Authority to reduce the maximum draft of ships passing through it from 15 meters to 13 meters, forcing larger ships to carry less cargo. In August, the wait to cross the channel was even four times longer than that recorded in June, because the number of daily crossings had to be limited. This year, the average of 14,000 ships that sail the canal annually will decrease. There is a fear of increased shipping prices, longer transit times and thus cost overruns for Ecuador’s foreign trade with Europe and the East Coast of the United States, mainly.

In the near future, the inevitable El Niño phenomenon will end up revealing our contingency measures to deal with it, warning of consequences for supply chains. Roads and bridges that have not been maintained for years and collection and distribution facilities located in coastal basins warn us of the high vulnerability of the supply chains that supply the national market.

‘Insecurity is critical to food distribution and more complicated things are coming’

Furthermore, continued sea level rise will require large investments to maintain operational ports of great importance to Ecuador’s foreign trade, such as: Miami, New York, Rotterdam, Tokyo, among others. On the other hand, these investments will turn into additional costs for foreign trade using these ports.

I could go on listing more risk factors, but there is an urgent need to effectively prioritize what needs to be protected in supply chains of the greatest social and economic importance. Reduce the impact of possible cost overruns and avoid interruptions in internal and external trade, preserving markets and even winning back those lost by countries even less far-sighted than us.

What proposals do the presidential candidates have to deal with the El Niño phenomenon?

To do this quickly and well, associations and sector entities must proactively participate by identifying the most sensitive points in their supply chains that should not be scheduled. To provide productive and commercial intelligence services to warn of these changes in time, propose solutions and coordinate with related public entities to achieve the required solutions. As for the Child, there is very little time left. (OR)